Another alternative is a follows:

Install Soundflower. This creates a virtual audio output on your computer

Send the audio you wish to record so that it goes ro Soundflower 2ch. You could do this by either setting all audio to go there in the System Prefs, or you could use an app like Detour to send only one application's sound to Soundflower.

Now, all you have to do is record the sound coming INTO Soundflower 2ch. Either set Soundflower as your sound in in System Prefs, or use an app like AU Lab to record sound from it.

Nice and simple, and all free!

You only need AU Lab (for doing the equalizer and recording stuff) and Soundflower!

Go to your MIDI Configuration app (under Utilites), hit command-shift-A, check only Soundflower and your computer's internal audio output. Quit the MIDI config app. Open AU Lab, and when it asks for an Audio Device, choose the "agregate device" that you configured with the MIDI config app. Click done. Choose Edit -> Add Audio Input..., and this will add your Soundflower input. In your System Prefs for audio, make sure your aggregate device is selected for the input and Soundflower as output. Start recording in AU Lab (see its prefs to change filetype)! That's it!